UK. Budget airline Flybe has reached agreement with British Airways to acquire the latter’s BA Connect regional airline business. The deal is subject to a number of conditions including the completion of due diligence.

The proposed acquisition will create an enlarged business with over £600 million in revenues and carrying nearly 10 million passengers. The business will be operated in line with the current Flybe business model, which concentrates on short haul domestic and major European city markets.

The acquisition (which does not include BA Connect’s London City or Manchester/JFK routes) will significantly increase Flybe’s route network both in the UK and continental Europe and make Flybe Europe’s largest regional airline.

BA will acquire a 15% stake in the new business. Inflight retail is currently operated in-house at both airlines.